Paul Krugman details exactly how ending social distancing too soon will plunge the US economy into a long-lasting 'depression'
Far-right extremists have been arguing that aggressive social distancing measures and stay-at-home orders are crushing the U.S. economy; the point they miss is that a lack of social distancing — and all the unnecessary deaths that will cause — will hurt the economy a lot more. Liberal economist Paul Krugman, in his New York Times column, makes a compelling argument for why the amount of social distancing practiced now could mean the difference between a quick economic recovery and a long, painful depression.
The unemployment figures released on Friday, May 8 by the U.S. Bureau of Labor Statistics showed a brutal unemployment rate of 14.7%. To anti-shutdown zealots, that means that the U.S. needs to end social distancing sooner rather than later. But as Krugman explains, maintaining social distancing now would ultimately lead to a quicker recovery — whereas abandoning it prematurely could lead to long-lasting economic pain.
“An unemployment rate of 14.7% is pretty horrific, but the Bureau included a note indicating that technical difficulties probably caused this number to understate true unemployment by almost five percentage points,” Krugman notes. “If this is true, we currently have an unemployment rate around 20%, which would be worse than all but the worst two years of the Great Depression. The question now is how quickly we can recover.”
A quicker recovery, Krugman stresses, will require not “flattening the curve” in terms of coronavirus infections, but “crushing the curve.”
“If we could get the coronavirus under control, recovery could indeed be very rapid,” Krugman asserts. “True, recovery from the 2008 financial crisis took a long time, but this had a lot to do with problems that had accumulated during the housing bubble — notably, an unprecedented level of household debt. There don’t seem to be comparable problems now.”
“Crushing the curve,” according to Krugman, will require “a rigorous regime of social distancing for however long it takes to reduce new infections to a low level. And then, we would have to protect all Americans with the kind of testing and tracing that is already available to people who work directly for Donald Trump, but almost nobody else.”
Krugman notes that while “crushing the curve isn’t easy,” it is “very possible” and that “many other countries” (including Greece, South Korea and New Zealand) have “already done it.”
“Consider New York City, the original epicenter of the U.S. pandemic, where the numbers of new daily cases and deaths are only a small fraction of what they were a few weeks ago,” Krugman writes.
As Krugman sees it, the U.S. has two choices: continue to embrace aggressive social distancing now and “crush” the coronavirus infection rate — resulting in a quicker economic recovery — or abandon social distancing prematurely and suffer a long-lasting depression.
“You do have to stay the course,” Krugman advises. “And that’s what Trump and company don’t want to do.”